Divorce Mediation Blog

GOP Plan to End Alimony Deductibility: Time to reform the Alimony Reform Act?

Monday, November 20, 2017

Levine Dispute Resolution - Alimony

The House GOP seems to think that repealing §215 of the Internal Revenue Code is a good idea. We have long believed that there are probably too many alimony-paying lawyers in Congress to let this day ever come. It probably won’t, but if it does, it will plunge the Alimony Reform Act (ARA) (eff. 3.1.12) into crisis. Either way, the legislature needs to respond.

M.G.L., ch. 208, §48 defines “alimony” as: “the payment of support from a spouse, who has the ability to pay, to a spouse in need of support for a reasonable length of time, under a court order”. Nothing about tax impact. The drafters, like us, clearly took deductibility under federal and state law for granted.

Moreover, M.G.L., ch. 208, §53(b) defines a “reasonable and lawful” presumptive formulation for general term alimony, stating the general term alimony should generally not exceed the recipient needs, or 30-35% of the difference between the parties’ applicable gross incomes.

This statutory range makes the same once-safe assumption: that IRC §215 allows parties to leverage dollars to the family’s benefit, by shifting income tax from a higher progressive tax rate of the payor, to the payee’s lower rate.

If the alimony deduction dies, it will take the viability of §53(b) along with it. Yet, the zombie statute will persist, entitling litigants to rely on it, despite its infirmity; unless and until the state legislature takes corrective action. This will not happen overnight – these things never do – and in the meantime… Sophisticated divorce agreements have “savings” clauses, which help people adjust alimony sums in the unlikely event of a deductibility repeal, and the GOP plan grandparents existing judgments, at least until modification. But modification cases and new divorces won’t get off so easy.

Maybe, the legislature should take the GOP proposal as a warning shot, at least. The legislature could act pre-emptively. Sections 48 and 53(b) at least need reformulation, regardless of Congress’ ultimate action. We should convert the assumption of the tax-shifting leverage of continued deductibility for alimony into a clear predicate for the ARA, with provisions to address the alternative.

And, if the unthinkable happens, it’s better get started now.

Get e-mail notifications of new blog posts! Enter email address below.:

Delivered by FeedBurner

other articles

recent posts


private dispute resolution alimony statute Divorce Agreements pre-ARA alimony Massachusetts alimony and child support Chouteau Levine divorce lawyers divorce mediators COLA IRC §2704 Massachusetts alimony how baseball arbitration works Cohabitation Massachusetts lawyers health coverage family law mediation Levine Dispute Resolution Center LLC The Seven Sins of Alimony separation lawyers Baseball Arbitration family law arbitrators support orders mediations Act Reforming Alimony in the Commonwealth Alimony Reform Act mediators divorce agreement lawyer-attended mediation child support Defense of Marriage Act resolve disputes divorced mediation divorce litigation divorce and family law mediators med-arb self-adjusting alimony Massachusetts Divorce alimony Levine Dispute Resolution health insurance divorce mediator divorce arbitrator arbitrator traditional negotiations special master Massachusetts divorce mediators facilitated negotiations divorce mediation family support SJC med/arb MLB labor agreement litigation family mediation Matrimonial Arbitration Child Support Guidelines divorce process Self-adjusting alimony orders rehabilitative alimony alimony orders divorce and family law Boston LDRC Obamacare Same Sex Marriage Family Law Arbitration lawyer annulment arbitration Massachusetts Alimony Reform Act alimony reform legislation fraud dispute resolution Major League Baseball Arbitration family law Levine Dispute Resolutions divorce arbitration high-risk methodology Levine Dispute Resolution Center conciliation disputes Twinkies Baseball Players family law arbitrator family and probate law disputes Baseball divorce arbitrators mediator arbitrators General term alimony Massachusetts Lawyers Weekly alimony law divorce judgment DOMA medical benefits Uniform Arbitration Act divorce mediations